Money Matters | It’s a step forward, three steps back for Unicom’s mixed ownership trial
Whoever ends up with a stake in China United Network will be operating in a tailor made straightjacket.
Let’s just ignore the guessing game of who might be investing in China’s second-largest telecommunications group, in the so-called “mixed ownership” reform of the country’s state-owned enterprises. It’s not going to make an iota of difference.
The line was already drawn, as soon as Beijing announced that the share sale will be done by the A-share holding company, instead of the Hong Kong listed unit.
Whoever the new private shareholder is -- Alibaba, Baidu or Tencent -- it will be operating in a tailor made straightjacket.
The story dates back to 2002, when Unicom was already listed in Hong Kong. Beijing wanted to list it on the Shanghai exchange to raise more cash. This could not be done because Unicom was incorporated in Hong Kong, and the stock exchanges on the mainland didn’t allow offshore incorporated companies to be listed on them.
Therefore, a mainland incorporated firm had to be created for the sake of its A-share listing. That company contains nothing but an indirect holding of Unicom Hong Kong.
